Move over OPEC: North America is about to become a net exporter of oil.

At least, that's the word from the International Energy Agency's latest outlook. According to the IEA, the drilling boom for shale oil in states like North Dakota is putting U.S. crude production on track to pass Saudi Arabia. North of the border, output from Alberta's oil sands is expected to notch a similarly grand expansion.

But the agency's rosy forecast isn't all that it appears – and it certainly isn't going to lead to a significant break at the pump for you.

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Notions of energy independence, however farfetched they may seem today, play well to the IEA's target audience, which is largely American. But regardless of the political rhetoric we endured from both presidential candidates, energy independence isn't really the issue confronting the U.S. economy or North American motorists. The real issue is the cost of oil – not its country of origin.

It doesn't really matter whether the U.S. drills for its own oil, gets it from Canada, or ships it in from Venezuela or the Middle East. Hostile or friendly, no foreign supplier has turned off the spigot since the last OPEC oil shock three decades ago. There's plenty of oil. The problem isn't the availability of the fuel but the price needed to get it out of the ground.

Unfortunately, that's already more than we can afford.

That Brent oil, the de facto world oil price, is hovering near $110 (U.S.) a barrel is a clear signal of our growing dependence on the very unconventional sources of supply being championed in the IEA report. American energy independence isn't going to change the reality of triple-digit oil prices. On the contrary, oil prices will have to climb much higher for the IEA's forecast to come true. And if that's the case, does energy independence actually have any value for oil consumers?

The IEA pretends that its prediction for a huge increase in unconventional oil supply can occur with only a modest increase in oil prices from current levels. Such unbridled optimism is belied by what's going on in the industry. Getting oil out of the ground has never been more expensive. Just look at the pullback in capital spending among oil sands operators. And costs are only going up from here. Forecasts of exponential growth in U.S. shale oil ignore some very real challenges with it – such as wells that deplete at a rate of more than 40 per cent, even in rich fields like Eagle Ford in Texas, and a lack of basic pipeline infrastructure in the Bakken.

Just like the forecasts the IEA made a decade ago about the much-anticipated increase in deep-water production from the Gulf of Mexico, the agency's hopes for another game changer are unlikely to pan out.

Good old-fashioned North American engineering know-how like horizontal drilling, fracking or steam-assisted gravity drainage (SAGD) isn't why we're now tapping supply from problematic sources like the oil sands or the Bakken formation. Neither of these are new discoveries. The real reason that once-marginal sources of supply have been catapulted to prominence is soaring global oil prices.

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Without higher prices, no one would be chasing tight oil from shale formations or trying to pull tar-like bitumen out of the oil sands.

It's no mystery how rising prices work. The higher the price of oil, the more will be produced. This is a fundamental economic tenet that continually confounds the geologists of the peak oil movement.

In a world of $200-a-barrel oil, the IEA is probably right in believing that U.S. production might reach 11 million barrels a day or that Canada could deliver six million barrels into the global market.

The problem with such a bullish outlook for supply is explained by another economic axiom – the dampening effect of a slump in demand. The higher the price of oil, the less of it our economies can afford to burn. If global economic growth is already grinding to a halt when oil prices are around $100 a barrel, what do you think would happen to economic growth – and hence global oil demand – if prices reached the even higher levels needed to make the IEA's supply dreams come true?

Jeff Rubin is the former chief economist of CIBC World Markets and the author of the award-winning Why Your World Is About To Get A Whole Lot Smaller. His recent best seller is The End of Growth .

In his follow-up to his award-winning and number one best-selling first book Why Your World Is About To Get A Whole Lot Smaller, former CIBC World Markets chief economist Jeff Rubin asks a fundamental question: “What will it be like to live in a world without growth?”The end of cheap oil means the end of the easy answers to renewing prosperity. More

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